Social innovation in climate finance

Book section : Chapter

Climate change threatens low– and middle-income countries (LMICs), which face a multibillion-dollar climate financing gap. This chapter examines the Green Climate Fund (GCF), established under the 2015 Paris Agreement, as a social innovation model for mobilizing climate finance in LMICs. Using a social innovation lens, we analyze its evolution from 2009–2024. Since its inception, the GCF has allocated $15 billion across 270 projects, prioritizing country ownership and impact in vulnerable regions. While designed to balance mitigation and adaptation funding and strengthen local capacity, challenges persist. Three-quarters of funding remains controlled by international entities, and adaptation projects receive only a quarter of funds due to scalability barriers. The GCF's potential lies in building collaborative networks, yet reliance on traditional financiers and complex processes limits access. While it has improved process efficiency, gaps remain in outcome measurement and LMIC-driven projects. Overcoming barriers is essential to realizing its mandate for climate finance in LMICs.

Authors: Chaudhury, A; Lee, S

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Edward Elgar Publishing
• Host title: The Elgar Companion to Social Innovation and the Sustainable Development Goals
• Pages: 41-54
• Chapter number: 2
• Publication date: 2026-01-20
• DOI: 10.4337/9781035326044.00011
• ISBN-10: 9781035326037
• ISBN-13: 9781035326044
• Language: English
• Keywords: SBTMR; climate finance; social innovation; climate change; green climate fund; low– and middle-income countries
• Subtype: Chapter